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The First Step of Good Tax Planning is Good Recordkeeping

First step of good tax planning is good recordkeeping

Year-round tax planning is for everyone. An important part of that is Recordkeeping. Gathering tax documents throughout the year and having an organized Recordkeeping system can make it easier when it comes to filing a tax return or understanding a letter from the IRS.

Good Records Help

Identify sources of income

Taxpayers may receive money or property from a variety of sources. The records can identify the sources of income and help separate business from nonbusiness income and taxable from nontaxable income.

Keep Track of Expenses

Taxpayers can use records to identify expenses for which they can claim a deduction. This will help determine whether to itemize deductions at filing. It may also help them discover potentially overlooked deductions or credits.

Prepare Tax Returns

Good records help taxpayers file their tax return quickly and accurately. Throughout the year, they should add tax records to their files as they receive them to make preparing a tax return easier.

Support Items Reported on Tax Returns

Well-organized records make it easier to prepare a tax return and help provide answers if the return is selected for examination or if the taxpayer receives an IRS notice.

In general, the IRS suggests that taxpayers keep records for three years from the date they filed the tax return. Taxpayers should develop a system that keeps all their important information together. They can use a software program for electronic Recordkeeping. They could also store paper documents in labeled folders.

Records to Keep Include

Tax-Related Records

This includes wage and earning statements from all employers or payers, interest and dividend statements from banks, certain government payments like unemployment compensation, other income documents and records of virtual currency transactions. Taxpayers should also keep receipts, canceled checks, and other documents – electronic or paper – that support income, a deduction, or a credit reported on their tax return.

IRS Letters, Notices and Prior Year Tax Returns

Taxpayers should keep copies of prior year tax returns and notices or letters they receive from the IRS. These include adjustment notices when an action is taken on the taxpayer’s account, Economic Impact Payment notices, and letters about advance payments of the 2021 child tax credit. Taxpayers who receive 2021 advance child tax credit payments will receive a letter early next year that provides the amount of payments they received in 2021. Taxpayers should refer to this letter when filing their 2021 tax return in 2022.

Property Records

Taxpayers should also keep records relating to property they dispose of or sell. They must keep these records to figure their basis for computing gain or loss.

Business Income and Expenses

For business taxpayers, there’s no particular method of bookkeeping they must use. However, taxpayers should find a method that clearly and accurately reflects their gross income and expenses. Taxpayers who have employees must keep all employment tax records for at least four years after the tax is due or paid, whichever is later.

Health Insurance

Taxpayers should keep records of their own and their family members’ health care insurance coverage. If they’re claiming the premium tax credit, they’ll need information about any advance credit payments received through the Health Insurance Marketplace and the premiums they paid.


iLead Tax LLC

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3 Important Reasons to Acquire a QuickBooks ProAdvisor Certificate

3 Important Reasons to Acquire a QuickBooks ProAdvisor Certificate

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5 Important Things You Should Know About Enrolled Agent

5 Important Things You Should Know About Enrolled Agent

Here are 5 Things You Should Know about Enrolled Agent

1: Who is an Enrolled Agent (EA)?

An Enrolled Agent (EA) is the America’s Highest Licensed Tax Expert from the Internal Revenue Service

They are Authorized Tax Professionals like CPA / Attorneys with Unlimited Tax Representation Rights

Every Big 10 / Good US MNCs needs CPAs / EAs to Serve or Represent their Tax Clients in USA

EAs are in Huge Demand in India, in USA and other Countries too

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Enrolled Agent course takes lesser time to Pass than CPA / Attorney Exams

2: How to Become an Enrolled Agent (EA)?

Enroll for the EA Training

Receive the Class Links

Learn Through Lectures

Make Class Notes

Solve MCQs at least Twice

Study the Material

Call / WhatsApp / Zoom / Skype for any Doubts / Help

Apply for PTIN (Preparer Tax Identification Number)

Schedule the EA Exam with Your Nearest Prometric Centre

Pass ALL 3 Papers of the Special Enrollment Examination(SEE) with the IRS

Obtain Your Dream Job / Start Your Own Tax Practice

3: How Tough is this EA Exam?

Any one who is 18+ Years with a Valid Passport can be an Enrolled Agent (EA)

You can be from Any Education Background to Pursue EA

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We are the only ONE across the planet earth offering 150+ Hours of Training in USA Taxation. iLead is the ONLY Academy to Offer You Both THEORY & PRACTICAL Training on USA Taxation

One can PASS EA and also LEARN How to Prepare Personal & Business Tax Returns. You can Enroll for Real Time Practical Training / Internship Program to get Real Time Preparation Experience. iLead has BOTH Academy which produces Enrolled Agents and an LLC which serves Tax & Accounting Clients in USA

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This is the only course in US Tax Industry that can get even a Fresher Earn > INR 4,91,318 per annum + Variable Compensation / Performance Bonus. Please check https://www.payscale.com/research/IN/Job=Enrolled_Agent/Salary

FRESHERS itself are paid at least INR 40,000 to INR 50,000 per month (in India) and USD 45,000+ per annum in USA. When your communication is good and you have practical tax preparation experience, you can expect to earn even more!

When you already have experience in USA Taxation, getting an EA Credential helps you get a Managerial Role it also helps you to Start Your Own Tax Practice too in the future

If you are working for a good company, they can even send you to USA on Temporary / Permanent Assignments. Refer EA if you have someone in USA, they can also do EA and they can Earn 20% on the Business they bring to iLead Tax LLC

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  • Enrolled Agent is the HIGHEST Tax Credential in USA awarded by US Govt (IRS)
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Go Through Our Facebook Page, Linkedin Page & YouTube Channel for more information

Email📧 : EA@iLeadTax.com or Visit 🌐 www.ileadtaxacademy.in or www.iLeadTax.com

Talk to Our EA Enrollment Advisor Today! Transform Yourself into a Licensed Tax Expert / Tax Practitioner

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